Agenda item

To recommend a budget for 2020/21 to the Council. 

That it be RECOMMENDED TO COUNCIL that:

1.   A net budget of £8,956,607 be APPROVED.

2.   A Band D Council Tax of £124.36, an increase of £5.00 per annum, be APPROVED.

3.   The use of New Homes Bonus, as proposed in Paragraph 3.5 of the report, be AGREED.

4.   The addition of £183,965 to the capital programme to fund new ICT requirements, as outlined in Paragraph 9.5 of the report, be AGREED.

5.    The capital programme, as proposed in Appendix A to the report, be AGREED.

83.1           The report of the Head of Finance and Asset Management, circulated at Pages No. 38-52,  set out a proposed budget for 2020/21 which the Committee was asked to recommend to Council for approval.

83.2           The Head of Finance and Asset Management drew attention to a number of key points. He explained that the local government finance settlement would be rolled over for a further year with an uplift in funding in line with inflation - this would only generate an additional £31,000 given that the base funding level was so low. In terms of New Homes Bonus funding, for 2020/21 the Council would receive £3.73million from the Scheme; however, there was the potential that the funding may be withdrawn after that and this was of significant concern to the Council given the amount that was utilised to support the base budget. For 2020/21, the proposed use of New Homes Bonus included support to the base budget; planning appeals; climate emergency support; HGV driver training; collection of small electrical equipment; IT and digital development plan; Borough Elections; business rates intelligence; Community Funding Officer; Heritage Action Zone match funding; Economic Development and Tourism Officer; tourism study; Medium Term Financial Strategy reserve; investment fund; and pay award contingency. Referring to business rates retention, the Head of Finance and Asset Management explained that the government’s intention had been to move the local authority sector as a whole to a 75% retention scheme from 1 April 2020; however, this had now been delayed for one year and the current 50% retention scheme would instead apply for 2020/21. It was estimated that the growth retained under the 50% scheme would increase by around £60,000 to £739,000. Referring to Council Tax, the Head of Finance and Asset Management advised that, given the level of deficit for 2020/21 and the medium term financial forecast of continued deficits, it was necessary to recommend an increase in Council Tax of £5 per year at Band D level – the equivalent of 4.19% - in order to balance next year’s budget. The recommended increase should mean the Council remained within the bottom 10 precepting authorities. Referring to Paragraph 6.0 of the report - budget proposals – Members were advised that the projection within the Medium Term Financial Strategy had highlighted a potential deficit of £0.8million for 2020/21 and this had been reflected in the draft budget requirements put forward by service areas. Significant savings and increased income had been made to offset the deficit and this had resulted in the net cost of services only increasing by £183,777 (2.09%) for the next financial year. Particular attention was drawn to the estimates for 2020/21 which included an allowance for a 2% pay award – however, negotiations between Unions and the employers were yet to progress with Unions requesting a pay award significantly in excess of inflation; should agreement be reached which was in excess of 2%, a contingency within New Homes Bonus allowed coverage up to a level of 3%. The finance available to fund the net budget requirement included: revenue support grant; rural services delivery grant; business rates baseline; retained business rates; New Homes Bonus; collection fund surplus; minimum revenue provision; and net transfers to/(from) reserves. When this was all taken into account the balance to be funded by Council Taxpayers for 2020/21 was £4,394,992.

83.3           During the discussion which ensued, a Member indicated that the increases detailed at Table 5 included some quite large increases in the areas of Corporate Services, Development Services and Community Services and he questioned what the increases related to. In response, the Head of Finance and Asset Management explained that they did not generally relate to an increase in staff but covered a variety of things e.g. the increase in Corporate Services was use of New Homes Bonus funding to support the ICT team and ICT infrastructure and Community Services included the increased costs to waste and recycling etc. Another Member questioned whether the money set aside for the ICT digital development plan, and the subsequent increase in ICT capacity, was enough for the Council’s needs. In response, the Head of Finance and Asset Management explained that, compared to the overall need, the amount set aside was probably not really enough but the Council had a finite amount of money to allocate which had to be taken into consideration. Compared to other services the ICT section had a larger allocation for 2020/21.

83.4           Referring to Pages No. 45 and 46, a Member questioned why the costs of collecting recycled materials had increased and what the anticipated costs of the Council’s Microsoft Office licences was expected to be. In response, the Head of Finance and Asset Management explained that the increased cost in dealing with recycled materials was due to the tonnage collected and increased contamination rates as well as the cost of the Waste Transfer Station. The Council had just begun to look at the recycling of paper and card as the market for those materials was limited currently which would have an impact on the Council’s finances. In respect of Microsoft licensing, the ICT Manager advised that this was extremely complicated. The Council was currently reaching the end of its three year agreement and, as Microsoft now carried a lot of the market, the discounts it had given had now expired – the Council had been receiving a 65% discount but that was now more like 15-20% - in addition, the Council had an increased number of users in many service areas which added to the costs. Other options had been considered but the costs had been extremely prohibitive. Another Member questioned whether £70,000 from New Homes Bonus for Borough Elections was in proportion. In response, the Head of Finance and Asset Management explained that the New Homes Bonus funding was used to pay for the Borough Elections so if that funding ceased the Council needed to ensure it could still pay for its own elections. The £70,000 which was recommended made a good start to the funding of the next elections in 2023 which in 2019 had cost around £140,000. In terms of the emerging risk of the additional cost of recycling, a Member questioned how it was known that Tewkesbury Borough Council was the cause of the contamination. In response, the Head of Community Services explained that the loads were kept separate at the Waste Transfer Station and when it was run through the Materials Recovery Facility (MRF) at Avonmouth it was Tewkesbury Borough’s waste which was contaminated.

83.5           Having considered the information provided, it was